Wright v. Lawton , 37 Conn. 167 ( 1870 )

Foster, J.

The plaintiff seeks to recover of the defendant the sum of $981-^ with interest from the 15th of December, 1862, for money paid by the plaintiff on that day to Messrs. James Conner & Sons for the use and benefit of the defendant.

It is not claimed by the plaintiff that he made this payment in money, but that he gave his endorsed note for the amount; that the note was given and received in full payment and discharge of a debt which the defendant was legally bound to pay; and that it was therefore to be regarded as a money payment, and conferred the same right of action and recovery.

It has frequently been decided, both in England and in this country, that where a party gives a promissory note for the debt of another which the creditor accepts in payment, it is as a payment of money to the party’s use, and may be recovered as such. Among the early cases, perhaps the earliest, in which this doctrine was distinctly laid down, is the case of Barclay v. Gooch, 2 Esp. Rep., 571. The correctness of this decision, which was made in 1797, was questioned, but the case was not overruled, a few years after in Taylor v. Higgins, 8 East, 169. In that case the plaintiff and defendant were jointly holden on a bond to a third person, a creditor of the defendant, to pay a debt of the defendant. The plaintiff gave his bond and wai’rant of attorney, which was accepted as payment and satisfaction of the old debt, and the old bond and warrant of attorney were cancelled. Without paying this last named bond, the plaintiff brought an action against the defendant, and' the question was, whether the plaintiff was entitled to hold the defendant to bail for ¿6120, the amount of the bond, upon an affidavit, stating the cause of action to be for so much money paid, laid out, and expended by the plaintiff for the defendant’s use.

Lord Ellenborough said: — “ There is no pretence for considering the giving of this new security as so much money paid for the defendant’s use. Supposing even the case of the note of hand or bill of exchange [referring to Barclay v. Gooch,] to have been rightly decided, still, this security, consisting of a bond and warrant of attorney, is not the same as that, and is nothing like money.” The current of American authorities sustains, we think, substantially the doctrine of the case of Barclay v. Gooch. The plaintiff’s counsel refer us to numerous cases decided in the states of Maine, New Hampshire, Vermont, Massachusetts, and New York, in which the principle of that case is recognized and approved. We are not disposed to examine these cases particularly, or to express any opinion of their merits, as we decide the case at bar upon certain facts detailed in the auditor’s report which make it unnecessary.

The debt of the defendant which the plaintiff claims to have paid, and for the payment of which he seeks to recover in this action, arose out of the purchase of an interest in a certain newspaper establishment called the “ Daily Morning News.” Prior to, and at the time of this purchase, this establishment was owned by the plaintiff and William Faulkner, who were associated in business under the firm of Faulkner & Wright. The defendant bought out Faulkner’s interest, and in part payment therefor gave him two promissory notes on time, made by the plaintiff, one for three, the other for five hundred dollars. These notes were payable to the order of Faulkner, and as between the plaintiff and defendant were merely accommodation notes, the defendant agreeing to save the plaintiff from all liability as maker of the same. This was on or about the 8d of September, 1859.

Here was a payment of the defendant’s debt by a negotiable note of the plaintiff, and if the case stopped here we do not see why it would not fall within the principle of Barclay v. Gooch, and divers subsequent cases, on the authority of which the plaintiff would be entitled to recover. But- the report sets forth additional, and, as we think, controlling facts, which lead to a different result.

At the time that the plaintiff gave Faulkner these notes in payment of. the defendant’s debt, the plaintiff was in poor credit, so poor that it was supposed Faulkner would not be able to negotiate the notes, but would be compelled to hold them till maturity, when, in the event of a failure of consideration and of a suit brought by Faulkner on the notes, the defendant would be able to make defence and resist the payment of the same. It is further found that some of the representations made by Faulkner to the defendant, as to the condition of the office at the time of the purchase, were not true.

It appears however that Faulkner did negotiate the notes, and as it seems, though the fact is not distinctly found, before their maturity, turning them out for a valuable consideration to Messrs. James Conner & Sons, who after the maturity of the three hundred dollar note brought a suit upon it against the plaintiff, and recovered a judgment against him for the amount of the same with interest in the Superior Court for the county of New Haven at the May term, 1860. This was without the knowledge of the defendant.

On the 16th of December, 1862, this judgment being unsatisfied, and the remaining note of five hundred dollars having-matured and being unpaid, the whole matter was arranged between the plaintiff and Conner & Sons, by a note at three months made by the plaintiff for $981]3&, payable to the order of one Charles H. Martin, and by him endorsed, in consideration of which Messrs. Conner & Sons released and discharged the plaintiff from the judgment and gave up to him the five hundred dollar note. This was also done without the knowledge of the defendant; and it is further found that both the maker and indorser of the last named note were irresponsible persons. Now the question is, does the giving of this note enable the plaintiff to recover of the defendant as for so much money paid for his use ?

We are decidedly of opinion that it does not. A note with irresponsible names is no better than a note with fictitious names, or no names at all, — mere blank paper — worthless. Without doing violence to well settled principles of law, we cannot regard such paper as money in the payment of a debt. When a promissory note has been given and received in payment and discharge of a debt, and where courts of law have recognized giving such a note as the payment of so much money, it has been on the ground that the note was of value . — equivalent to money. That cannot be said of this note. But it is said that it paid a debt, discharged a liability of the defendant. A worthless piece of paper is no legal consideration for the discharge of a debt, and if this debt was discharged it must be considered a voluntary discharge; the creditor forgave his debtor from the payment of his debt.

But the debt for which this note was given was not in form the debt nor the liability of the defendant, and there was therefore no debt of the defendant which could in any proper sense be discharged by the acceptance of the new note and the discharge of the old note and the judgment. The defendant’s name did not appear upon the paper, nor was he a party to the judgment. The original notes, the three and five hundred dollar notes, were made by the plaintiff alone and he only was liable on them. They were given as part consideration for the purchase of Faulkner’s interest in the newspaper establishment, but nobody connected with the transaction regarded them as money; they were not passed or treated as such. The credit of the maker was so poor that it was supposed Faulkner would be unable to pass them, but would be compelled to hold them till maturity; and then, in the event of a suit brought on them, should there be a failure of consideration, the defendant could avail himself of it as a defence. A suspicion seems to have been entertained from the beginning that the value of the intei’est purchased was not so great as was represented, and hence payment was made in this peculiar kind of paper. The report states that some of the representations made by Faulkner to the defendant as to the condition of the office at the time of the purchase were not true. Such representations of course could not affect an innocent indorsee who took the notes for a valuable consideration before maturity; still they enable us to understand bettor the original transaction, and show that giving these noies was not considered at the time as a money payment. Manifestly no action for money paid could have been maintained by the plaintiff against the defendant when the notes were given, the agreement being that the defendant was to save the plaintiff harmless from all liability as maker of the same. But it was then, if ever, that the plaintiff paid the debt of the defendant, for he has done nothing since but voluntarily, without the knowledge of the defendant, to substitute a new promise for the old one. The personal liability of the plaintiff is substantially the same now that it was originally. He has paid nothing, and the new promise, being of no value in the market, cannot be considered equivalent to the payment of money.

It must be understood that wo do not hold that the plaintiff, when he shall actually pay the amount of his note to Conner & Sons, can not recover of the defendant the. amount paid. The original debt was equitably that of the defendant to pay, and it remains equitably his debt. Whenever therefore the plaintiff is compelled to pay it he will at once have a right of action against the defendant for the amount paid. What we now hold is merely that he has not yet paid the debt, his own worthless note not constituting payment. That note, as we have remarked, is only a substitute for the original notes. It is at best merely a renewal of those notes, with some unimportant changes of form; and the plaintiff stands no better on the new note than he did on the old ones. He must in some form pay the original notes before he can have any claim on the defendant for money paid.

In this view of the case, it becomes unnecessary to consider the other questions raised. The Superior Court is advised to render judgment for the defendant.

In this opinion the other judges concurred.